Foreign investors who have their eye on U.S. crowdfunding opportunities may face a number of restrictions. Recently, the U.S. government softened some of the restrictions on crowdfunding investment, enabling non-accredited investors to invest in smaller dollar values in various projects. With that said, many of the established crowdfunding platforms currently only allow accredited investors to invest in their offerings. This limits participation to certain wealthy individuals and entities in the U.S., and also impacts the ability of foreign investors to participate. Even an international accredited investor may face obstacles investing in these U.S.-based opportunities.
Becoming an Accredited Investor
Nothing in the current makeup of the U.S. federal regulations forbids a foreign investor from becoming an accredited investor. For private individuals, investor accreditation requirements restrict participation to individuals with a minimum yearly income or assets greater than an established amount.
However, foreign investors must also have to abide by regulations in their own countries of origin. These regulations may include stiffer requirements for investing, a formal application process, or even complete prohibition.
Intelligent crowdfunding platforms that only accept accredited investors may ask you if you have accredited investor status. They may also be reluctant to handle money from foreign investors due to the possible legalities involved with accepting funds from your country of origin. Compliant crowdfunding platforms will not accept investments from an international accredited investor that does not allow such investment in the U.S.
Bypassing the Obstacles
Foreign investors with a desire to invest in U.S. unregulated securities may be able to avoid some of the issues they may face with certain crowdfunding sites. This could be done by setting up a U.S.-based company from which to carry out their investing, for the purpose of bypassing individual investing restrictions from their country of residence and avoiding being classified as a foreign individual investor by crowdfunding sites.
An international accredited investor may have the opportunity to invest in U.S. crowdfunding opportunities. However, this should only be done after consulting with proper legal counsel. The regulations that govern participation in U.S. crowdfunding opportunities may vary from country to country. It is essential that the investor understands the laws both in the U.S. and in his or her country of origin before moving forward.